Polaris Inc.

PII

Miscellaneous Transportation Equipment

Mkt Cap

$4.631B

PE

11.78

Debt

$2.068B

Cash

$333.7M

EV

$6.366B

FCF

$305.9M

Market Cap

$4.631B

P/E Ratio

11.78

Debt

$2.068B

Cash

$333.7M

EV

$6.366B

FCF

$305.9M

Charts data: {"Earnings":[{"time":"2014-12-30","value":454029000},{"time":"2015-12-30","value":455361000},{"time":"2016-12-30","value":212948000},{"time":"2017-12-30","value":172492000},{"time":"2018-12-30","value":335257000},{"time":"2019-12-30","value":323884000},{"time":"2020-12-30","value":124800000},{"time":"2021-12-30","value":493900000},{"time":"2022-12-30","value":447100000},{"time":"2023-12-30","value":502700000}],"Sales":[{"time":"2014-12-30","value":4479648000},{"time":"2015-12-30","value":4719290000},{"time":"2016-12-30","value":4516629000},{"time":"2017-12-30","value":5428477000},{"time":"2018-12-30","value":6078540000},{"time":"2019-12-30","value":6782518000},{"time":"2020-12-30","value":7027900000},{"time":"2021-12-30","value":8198200000},{"time":"2022-12-30","value":8589000000},{"time":"2023-12-30","value":8934400000}],"Net Margins":[{"time":"2014-12-30","value":0.1013537224353342},{"time":"2015-12-30","value":0.0964893024162533},{"time":"2016-12-30","value":0.04714755185781254},{"time":"2017-12-30","value":0.03177539482989428},{"time":"2018-12-30","value":0.05515419821207066},{"time":"2019-12-30","value":0.04775276674532968},{"time":"2020-12-30","value":0.01775779393559954},{"time":"2021-12-30","value":0.0602449318143007},{"time":"2022-12-30","value":0.05205495401094423},{"time":"2023-12-30","value":0.05626566977077364}],"Assets":[{"time":"2014-12-30","value":2074935000},{"time":"2015-12-30","value":2387462000},{"time":"2016-12-30","value":3099597000},{"time":"2017-12-30","value":3089593000},{"time":"2018-12-30","value":4124915000},{"time":"2019-12-30","value":4430529000},{"time":"2020-12-30","value":4632700000},{"time":"2021-12-30","value":5047800000},{"time":"2022-12-30","value":5217900000},{"time":"2023-12-30","value":5516300000}],"Stockholders Equity":[{"time":"2014-12-30","value":861267000},{"time":"2015-12-30","value":981477000},{"time":"2016-12-30","value":867040000},{"time":"2017-12-30","value":931659000},{"time":"2018-12-30","value":867015000},{"time":"2019-12-30","value":1108202000},{"time":"2020-12-30","value":1144800000},{"time":"2021-12-30","value":1226300000},{"time":"2022-12-30","value":1101500000},{"time":"2023-12-30","value":1420800000}],"ROE":[{"time":"2014-12-30","value":0.5271640501725946},{"time":"2015-12-30","value":0.4639548354164183},{"time":"2016-12-30","value":0.2456034323675955},{"time":"2017-12-30","value":0.18514499403751802},{"time":"2018-12-30","value":0.3866795845515937},{"time":"2019-12-30","value":0.2922607972192795},{"time":"2020-12-30","value":0.1090146750524109},{"time":"2021-12-30","value":0.40275625866427467},{"time":"2022-12-30","value":0.405901044030867},{"time":"2023-12-30","value":0.35381475225225223}],"ROA":[{"time":"2014-12-30","value":0.34443970534016727},{"time":"2015-12-30","value":0.2999582820585207},{"time":"2016-12-30","value":0.11300759421305415},{"time":"2017-12-30","value":0.11640918399284307},{"time":"2018-12-30","value":0.11816291972077},{"time":"2019-12-30","value":0.1091677765792753},{"time":"2020-12-30","value":0.0458264079262633},{"time":"2021-12-30","value":0.14045722889179443},{"time":"2022-12-30","value":0.15418080070526458},{"time":"2023-12-30","value":0.12705980457915633}]}

Polaris Inc. designs, engineers, manufactures, and markets powersports vehicles worldwide. It operates through three segments: Off-Road, On-Road, and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; moto-roadsters, quadricycles, and boats; and aftermarket parts and apparel. It also provides ORV accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers light duty hauling and passenger vehicles; gear and apparel, such as helmets, goggles, jackets, gloves, boots, bibs, hats, pants, and leathers; and pontoon and deck boats. It provides its products through dealers and distributors, and online; and retail and e-commerce sites. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1945 and is headquartered in Medina, Minnesota.

Sector

10-Q
9/30/23
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6/30/23
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3/31/23
10-K
12/31/22
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12/31/19
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Polaris Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$305.9M	$322.4M	$339.6M	$357.6M	$376.5M	$396.1M	$416.6M	$438M	$460.2M	$483.5M	$507.6M	$5.076B
DCF		$280.3M	$256.8M	$235.2M	$215.2M	$196.9M	$180.1M	$164.6M	$150.5M	$137.4M	$125.5M	$1.255B
Value	$3.197B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 5.2%

Earnings Stability 5%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	9.6%	4.7%	3.2%	5.5%	4.8%	1.8%	6%	5.2%	5.6%	4.6%
ROA	30%	11%	12%	12%	11%	4.6%	14%	15%	13%	10%
ROE	46%	25%	19%	39%	29%	11%	40%	41%	35%	28%

What is the average Net Margin?

The average Net Margin over the past 5 years is +4.82%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.17%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +11.58%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.78%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +32.51%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.34%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	2.45	3.16	2.43	8.06	4.61	1.98	-511.74	11.16	3.73	6.76
Debt Equity	0.48	1.32	1.03	2.34	1.68	1.39	1.92	2.31	1.35	1.50
MIN
Graham Stability	-	-	46%	100%	100%	45%	100%	100%	100%	45%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.76.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -14.74.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.45.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	10%	8%	8.3%	4%	0.11%
Net Income	13%	8.4%	59%	12%	11%
Stockholders Equity	7.3%	10%	7.5%	29%	1.2%
FCF	5.1%	15%	-14%	130%	17%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +8.01%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.11%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +8.44%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +10.89%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +10.38%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.24%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +15.31%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +16.85%.